Hacker News Reader

Given what this expose says about institutional lending not being able to account for high ROI, how is Gemini Earn[0] able to offer up to 8% on GUSD and slightly less on other coins? Gemini is audited and says all GUSD Earn backing funds are FDIC insured up to 250k. Definitely concerning.

[0]:https://www.gemini.com/earn

View on HN

From that page: For GUSD in Earn, while the U.S. dollar reserves backing the GUSD tokens are eligible for FDIC insurance, the GUSD tokens themselves are not insured, whether or not in Earn.

I'm not sure how to parse that, but it doesn't sound reassuring?

Seems the correct way to parse that is "the GUSD tokens themselves are not insured, whether or not in Earn". The first clause is deliberate obfuscation, and is basically the same as a random member of the public saying "if you give me cash and I put it in my account, that account's FDIC insured" in the hope that this makes him sound like a financial intemediary and not a guy that's really keen for you to give him cash.

It means that Gemini is not responsible for the GUSD coins you purchased, but if you have 1 GUSD coin you can exchange it for 1 USD up to the FDIC limit.

Reply on news.ycombinator.com